FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Performance Evaluation for Decentralized Operations

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

True/False

Review LaterAdd Note

Review Later

The profit center income statement should include only controllable revenues and expenses.

A) True
B) False

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

Plamba Corporation had $250,000 in invested assets,sales of $490,000,income from operations amounting to $70,000,and a desired minimum rate of return of 15%.The residual income for Plamba is:

A) $32,500.
B) $10,500.
C) $59,500.
D) $37,500.

E) All of the above
F) None of the above

Correct Answer

verified

Show Answer

Question 53

Essay

Review LaterAdd Note

A portion of the divisional income statement for the year just ended is presented below in a condensed form.

In an investment center,the manager has responsibility and authority for making decisions that affect:

The primary disadvantage of decentralized operations is that decisions made by one manager may affect other managers in such a way that the profitability of the entire company may suffer.

In a cost center,the manager has responsibility and authority for making decisions that affect:

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases.

The manager of a profit center does not make decisions concerning the fixed assets invested in the center.

What additional information is needed to find the rate of return on investment if income from operations is known?

It is beneficial for related companies to negotiate a transfer price when the supplying company has unused capacity in its plant.

How do the responsibilities of a manager in an investment center compare to the responsibilities of managers in a cost or profit center?

If income from operations for a division is $6,000,invested assets are $25,000,and sales are $30,000,the profit margin calculated would be 24%.

The process of measuring and reporting operating data by areas of responsibility is termed responsibility accounting.

How much would Meeta-Products total income from operations increase?

Which transfer price approach is used when the transfer price is set at the amount sold to outside buyers?

In an investment center,the manager has the responsibility for and the authority to make decisions that affect:

Blancher Corporation had $495,000 in invested assets,sales of $660,000,income from operations amounting to $99,000,and a desired minimum rate of return of 15%.The investment turnover for Blancher is:

Which of the following expressions is termed the profit margin factor as used in determining the rate of return on investment?

If income from operations for a division is $6,000,invested assets are $25,000,and sales are $30,000,the profit margin calculated would be 20%.

A department store apportions payroll costs on the basis of the number of payroll checks issued.Accounting costs are apportioned on the basis of the number of reports.The payroll costs for the year were $100,000,and the accounting costs for the year totaled $50,000.The number of payroll checks issued and the number of reports for each department are as follows: